Rail transport opens new markets for oil, but draws criticism from some local communities

Jul 12, 2013

Rancher Tom Wilson stands at his property line, watching work proceed at the site where the oil loading station will be located.
Credit Willow Belden

A facility is slated to be built in the town of Fort Laramie that would load oil onto rail cars. Assuming the project gets the necessary permits from the Wyoming Department of Environmental Quality, it’s expected to be completed by the end of the year. Transporting oil by train is becoming increasingly popular, and experts say this facility and others like it will help the energy industry thrive. But local residents fear that a new industrial site could bring problems to their community. Wyoming Public Radio’s Willow Belden reports.

WILLOW BELDEN: The oil loading station would take crude oil from existing pipelines and load it onto rail cars, to be shipped to the east and west coasts. It would have the capacity to load 23 million barrels of oil per year, which is about half the amount produced in Wyoming.

Tad True is responsible for construction of the oil loading station. He says Wyoming needs facilities like this because more oil is being produced than the pipelines and nearby refineries can handle.

TAD TRUE: Right now there’s just simply a lack of take-away capacity on pipelines, and so the only alternative is to turn to rail.

BELDEN: While it’s more expensive, train transport provides important flexibility.

TRUE: Pipelines go from Point A to Point B, and that’s the only place they will ever go. Whereas a railroad, you can get onto the railroad and you can start at Point A, go to point Z, M, N, O, P, and A.

BELDEN: True says that means they’ll be able to ship crude to places that don’t have pipelines, like points on the East Coast. Those areas have traditionally relied on foreign oil, and True says enabling them to buy domestic oil is one step the U.S. can take toward energy independence.

Rob Hurless is deputy director of the School of Energy Resources at the University of Wyoming. He adds that producers can sell the oil for more money on the coasts, because people there are used to paying high international prices. And the buyers benefit too.

ROB HURLESS: All of a sudden, somebody from North Dakota says, “Gee whiz, you’re paying 105 bucks a barrel for that; we’ll sell it to you for 103 or 100 or whatever.”

The Fort Laramie oil loading station would be built in a spot where existing pipelines and rail lines converge. Credit: Wyoming Energy Strategy

BELDEN: New data from the U.S. Energy Information Administration shows that about 700,000 barrels of crude are transported by rail each day, which is nearly one-tenth of what the U.S. produces. And Hurless says he expects the numbers to keep rising. Which is why new oil loading stations are so popular.

Officials with Goshen County say the facility will be a good thing for the area, because it will bring dozens of jobs and boost property tax revenue. But for some residents, the negatives outweigh the positives. Tom Wilson is one of them. He stands by the barbed wire fence that separates his ranch from the site where the oil loading station is going in. Heavy equipment chugs through the site, building up a base to put in several sets of railroad tracks.

TOM WILSON: The train tracks are about 80 yards from our house.

BELDEN: Wilson and his wife have lived here since the 1960s. Their front porch used to look out onto cornfields. Now, their view is of a construction site. And once the facility is built, Wilson says, all they’ll see is train cars. In addition to the visual aspect, he’s worried about noise, dust, and emissions from the facility.

WILSON: This has been our home. We intended to be here. And we had no idea that we were going to be invaded by an industrial complex.

BELDEN: Wilson says he estimates that his property value could decrease as much as 25 percent because of the new facility. He’s not alone in his concerns. Just outside of the town of Fort Laramie is a national historic site. This was a former trading post along the Oregon Trail, and later a military camp. Tens of thousands of tourists visit each year. Mitzi Frank is the superintendent of the site.

MITZI FRANK: When visitors come to old Fort Laramie, one of the things they comment the most about the place is that when they come here they feel like they’ve stepped back in time. … They get a sense of not only Wyoming’s history, but our nation’s history. And so one of the things that impedes that sense of place is any kind of development that takes place around the fort.

BELDEN: Other residents worry about potential fires, citing the recent oil train disaster in Canada. And many believe emissions from the facility could pollute the air. Company officials say they’re taking all the necessary safety precautions, and that their technology will destroy 98 percent of harmful emissions. But the Department of Environmental Quality has no plans to monitor air quality in the area, either before or after the facility is completed.

ANTHONY SWIFT: There has been a lack of regulatory oversight as rail has become a large means of moving crude oil.

BELDEN: That’s Anthony Swift, an attorney with the Natural Resources Defense Council. He says there needs to be a thorough analysis of how shipping oil by rail affects local communities in the U.S., and possibly new regulations to protect those communities. But he adds that there are pros and cons to both rail and pipeline transport.

SWIFT: When it comes to spills, rail lines spill more frequently per barrel, but when pipeline spills happen, they tend to be larger and therefore pipelines actually spill more crude per barrel.

BELDEN: Overall, though, from an environmental point of view, Swift says the question people should be asking is not how to transport more oil, but how to use less oil. For Wyoming Public Radio, I’m Willow Belden.